FTSE CLOSE: Markets down on fears over global economy; banking shares up

17.20 (close): A buoyant session for blue chip financial stocks failed to boost the London market today amid renewed fears over the global economy and subdued trading on Wall Street.

The FTSE 100 Index gave back most of yesterday's gains, down 36.4 points at 5793.3, despite a sector-wide broker upgrade for UK bank stocks and better-than-expected third quarter results from JP Morgan Chase.

The US bank said profits rose by a third to 5.7billion US dollars (£3.5billion) thanks to a rebound in mortgage refinancing.

Encouraging consumer confidence
figures out in America initially helped the Dow Jones Industrial
Average, but it soon slipped back to stand 15 points lower as the London
market closed after figures from Wells Fargo bank proved a
disappointment.

Sentiment in London had also been hit
by lacklustre trading overnight in Asia, where investors were
unconvinced by figures released yesterday showing a sharp drop in
jobless claims in the US economy.

In currency news, sterling
strengthened to 1.607 US dollars after falls earlier this week, while
the pound was also higher at 1.24 euros.

Financial stocks were among those
enjoying gains after the JP Morgan figures and as broker Deutsche Bank
upgraded its rating on the banking sector.

Bank shares were buoyed earlier this
week by news that they do not have to hold extra capital against new
loans made under the £80billion Funding for Lending scheme.

Standard Chartered led the sector
higher with a rise of 32p to 1427.5p, while Lloyds Banking Group lifted
0.5p to 39.7p. Barclays and HSBC lost early session rises, closing down
0.5p to 232.2p and 1.9p to 595.3p respectively.

Financial services provider Hargreaves
Lansdown was the biggest Footsie riser after a first quarter trading
update showed record revenues, customer numbers and assets under
administration, despite a quiet summer for the investment management
industry.

Net new business fell 19 per cent, but
shares rose three per cent or 24p to 712p as analysts praised a
better-than-expected first quarter, given tough comparatives and a
difficult summer hampered by the dearth of fund launches.

Global economy worries weighed on heavily-weighted miners, with Kazakhmys down 30.5p to 715.5p and Evraz off 13.3p to 234.3p.

The engineering sector was hit by
another profit warning, this time from industrial materials firm Morgan
Crucible, coming just days after Cookson's profits alert.

Morgan shares plunged 11 per cent or
28.5p to 227.3p - making it the biggest faller in the FTSE 250 Index -
after it said full-year results will be below hopes due to deteriorating
conditions in China and Europe.

The news had a knock-on effect on GKN, which fell 7.1p to 209.9p in the top tier.

Wickes owner Travis Perkins was also
lower in the FTSE 250, down 41p to 1094p, after it reported a 2.4% fall
in third quarter sales and said margins were coming under pressure.

Elsewhere, shares in troubled London
cab maker Manganese Bronze were suspended at 10p after it said a
steering box fault would force it to recall 400 cabs and put all sales
of its TX4 model on hold.

The biggest Footsie risers were
Hargreaves Lansdown up 24p to 712p, Standard Chartered ahead 32p to
1427.5p, Lloyds Banking Group 0.5p higher at 39.7p and Intertek Group up
31p to 2773p.

The biggest Footsie fallers were Evraz
down 13.3p to 234.3p, Kazakhmys off 30.5p to 715.5p, Antofagasta 47p
lower at 1267p and GKN down 7.1p to 209.9p.

15:30: The banking sector was in sharp focus today after a sector-wide broker upgrade and third quarter results from JP Morgan Chase.

The
US bank unveiled better-than-expected figures, with profits up 36 per
cent to 5.3 billion US dollars (£3.3 billion) thanks to a surge in
mortgage business.

With
encouraging consumer sentiment figures also out in America, the Dow
Jones Industrial Average rose more than 60 points in early trade,
although the FTSE 100 Index remained in the red, down 4.5 points at
5825.2.

Trading
started on the back foot in London following lacklustre trading
overnight in Asia, where investors were unconvinced by figures released
yesterday showing a sharp drop in jobless claims in the US economy.

12:00

Strong gains in the blue chip banking
sector failed to boost the London market today as fears over the global
economy returned to the fore.

More...

The
FTSE 100 Index gave back some of yesterday's gains to stand 10.6 points
lower at 5819.2, despite a buoyant session for financial stocks after
broker Deutsche Bank upgraded its rating on the banking sector, while
downgrading telecoms and healthcare.

Banks dominated the risers board after Deutsche Bank's upgrades.

Standard Chartered set the pace with a
rise of 23.5p to 711.5p, while Barclays was 5.4p higher at 238.1p and
Lloyds Banking Group lifted 1p to 40.2p.

Bank shares have already been buoyed
this week by news that they do not have to hold extra capital against
new loans made under the £80 billion Funding for Lending scheme.

The sector was also firmly in the
spotlight ahead of third quarter US bank results, with JP Morgan Chase
due to report figures later today.

It is expected to post profits
broadly in line with the 4.9 billion US dollars (3.1 billion) it made in
the second quarter and revenues of 24.4 billion dollars (£15.2
billion).

Wickes
owner Travis Perkins was also lower in the FTSE 250, down 32.5p to
1102.5p, after it reported a 2.4 per cent fall in third quarter sales
and said margins were coming under pressure.

11:15

The FTSE 100 is down 0.23 per cent or 11.69 points at 5,818.06.

British
Gas has delivered a blow to millions of households by confirming it
will hike gas and electricity tariffs by six per cent from next month.

Centrica-owned
British Gas said the annual dual fuel bill for British Gas customers
with average consumption will increase by around £80 to £1,318.

A
total of 8.5 million households will be hit by the move, although
another one million British Gas customers on fixed price contracts will
be unaffected.

Graph showing the relationship between wholesale and retail gas prices

09:00

The FTSE 100 Index was in negative territory today, despite banks and insurers rounding off a good week with further gains.

Sentiment was impacted by lacklustre
trading in Asia, where investors were unconvinced by figures released
yesterday showing a sharp drop in jobless claims in the US economy. The
FTSE 100 Index was 11.9 points lower at 5818.2, matching the performance
of markets in France and Germany.

Banks dominated the risers board
after broker Deutsche Bank upgraded its rating on the sector, while
downgrading telecoms and healthcare.

Standard Chartered set the pace with a
rise of 15.5p to 703.5p, while Barclays was 4.5p higher at 237.2p and
Lloyds Banking Group lifted 0.6p to 39.9p. They were told this week that
they will not have to hold extra capital against new loans made under
the £80 billion Funding for Lending scheme.

Financial services provider
Hargreaves Lansdown was another big riser in the top flight after a
first quarter trading update showed revenues, customer numbers and
assets under administration were ahead of expectations. Shares rose 16p
to 704p.

Industrial materials firm Morgan
Crucible was the biggest faller in the FTSE 250 Index, declining 12 per
cent or 31.45p to 223.35p, after it said full-year results will be below
hopes due to deteriorating conditions in China and Europe.

08:05

Britain's top shares opened lower
this morning, slipping after a strong rise in the previous session after
Wall Street pared its gains to end flat overnight, reflecting concerns
over global growth and corporate earnings.

The FTSE 100 index was down 15.73
points, or 0.3 per cent, at 5,813.03 points, after a fall in U.S. weekly
jobless claims enabled the index to gain 0.9 per cent yesterday to snap
a three consecutive sessions of losses.

U.S. blue chips were up 0.3 per cent
by London's close but ended down 0.1 per cent as enthusiasm over the
U.S. jobs data was undermined by a drop in Apple shares after a legal
setback in a court ruling.

Miners led the retreat in London as
copper prices slipped, with investors awaiting China's trade economic
data due over the weekend to gauge the economic health of the world's
top metals consumer.

Chilean copper miner Antofagasta was
among the worst off, down 1.6 per cent with traders also citing the
impact of a downgrade to the stock by HSBC Securities to ‘underweight’.

PREVIEW:

The FTSE 100 is expected to down 15
to 18 points, or 0.3 per cent this morning, according to financial
bookmakers, retreating after a strong rise in the previous session after
Wall Street pared its gains to end flat and Asian markets fell
overnight.

The UK blue chip index closed up
53.04 points, or 0.9 per cent yesterday at 5,829.75, ending a three
session losing streak, led by gains in commodity and financial stocks as
investors' risk appetite improved after a fall in U.S. jobless. But
over the week so far the blue chip index is still 0.7 per cent lower.

U.S.
blue chips were up 0.3 per cent by London's close but ended down 0.1
per cent as enthusiasm over the U.S. jobs news was undermined by a drop
in Apple shares after a legal setback in a court ruling.

Banks will be in focus as JPMorgan
Chase & Co. JPM.N and Wells Fargo both kick off the U.S. sector's
third-quarter reporting season today.

London copper slipped this morning,
and was set for a 1 per cent weekly loss, as traders awaited China's
latest trade data due over the weekend to gauge the economic health of
the world's top metals consumer.

Brent
crude held above $115 a barrel this morning, trading near four-week
highs and on course for its biggest weekly gain in two months, supported
by tensions between Turkey and Syria, lower output at North Sea
oilfields and the upbeat U.S. data.

Britain
must be ready to adopt more unconventional measures so that debt
cutting and the eurozone crisis do not crimp economic growth for years,
Financial Services Authority Chairman Adair Turner said in a speech to
financial leaders yesterday.

No important British economic data will be released today, so investors will look across the Atlantic for macro direction to U.S. wholesale inflation numbers, due at 1230 GMT. September PPI is seen up 0.7 per cent on the month, to give an annualised increase of 1.8 per cent, down from 2.0 per cent in August.

Eurozone industrial output figures, due at 0900 GMT, were forecast to show factories in the region cut output by 0.4 per cent in August from the previous month, according to a Reuters poll, although market expectations for a stronger reading were rising after estimate-beating figures from individual countries earlier this week.